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(Continued)     The RFS Newsletter, Dec. 3, 2005. Page 2
People who watch traditional television are forced to view commercials in random fashion, regardless of what they may be interested in buying, says Tom Rogers, TiVo's president and chief executive. "We're flipping the dynamic," he says, allowing TiVo subscribers to search for ads that match their interests. "If you are in the market for a product, and you have no idea when commercials related to that kind of product are going to appear, it doesn't help you very much," he adds. TiVo users will be able to set up a profile of products on their television screens by clicking on categories such as automotive or travel or typing in keywords such as "BMW" or "cruises."

On a regular basis, TiVo will then download relevant commercials to TiVo recorders over the Internet or, for those users who don't have broadband, send the video via traditional broadcast signals. The commercials will appear on-screen in a folder next to the list of television shows TiVo users record. Advertisers, in turn, will be able to select the keywords and categories with which they wish to be associated for their ads. TiVo is in discussions with advertising agencies about the best way to price such advertising, but one option is to let advertisers bid on keywords as they do when buying ads on Internet search engines.

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